Government officials said Monday that scammers are seeking to take advantage of borrowers in danger of default by charging them upfront fees of $1,000 to $3,000 for help with loan modifications that rarely, if ever, pay off.

The frauds often involve companies with official-sounding names designed to make borrowers think they are using the Obama administration's efforts to help modify or refinance 7 million to 9 million mortgages.

"If you are struggling to make your mortgage payment, or if you are facing foreclosure, stay away from anyone who says that they will save your home for money upfront," Illinois Attorney General Lisa Madigan told reporters in Washington.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

"These are predatory schemes designed to rob Americans of their savings and potentially their homes," Treasury Secretary Timothy Geithner said. "We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar."

The Federal Trade Commission has sent warning letters to 71 companies it says were running suspicious advertisements. The agency also said it filed three new complaints against Northridge, Calif.-based Federal Loan Modification Law Center LLP, Newport Beach, Calif.-based Bailout.hud-gov.us, and Clearwater, Fla.-based Home Assure LLC, and the operators of those companies.

Bill Anz, founding partner of Federal Loan Modification Law Center, defended his operation, saying he will offer a refund to anyone who doesn't get a modification. About 20 percent of the 5,000 customers have received a modification so far, he said, with more in the works.

"People might not like it," Anz said, but "realistically, the problem is so large that the private sector must step in."

Still, Anz, who advertises on television and radio stations nationwide, said he would be willing to changing his company's name. He conceded the name "might be aggressive."

Thomas Ryan, the operator of Bailout.hud-gov.us, has agreed to take the Web site down. Ryan said he still operates another site — which he would not name — that generates leads for foreclosure rescue operations. "They're providing a legitimate service," he said.

A federal judge last month granted the FTC's request for a temporary restraining order against two New Jersey-based companies: Hope Now Modifications LLC and New Hope Modifications LLC. The government said the companies mimicked the Hope Now alliance, which runs the mortgage industry's foreclosure prevention effort.

The FBI is investigating about 2,100 mortgage fraud cases, a 400 percent increase from five years ago, Attorney General Eric Holder said Monday.

"If you prey on vulnerable homeowners with fraudulent mortgage schemes or discriminate against borrowers, we will find you and we will punish you," Holder said.

Homeowners do not have to pay to participate in the administration's Making Home Affordable program, which seeks to prevent foreclosures by making mortgages affordable through refinancing or modified terms.

The FTC said other signs of a mortgage scam are: promises to stop foreclosure or modify a loan; guarantees that your home will be saved and claims of a "97 percent success rate;" and use of official-sounding names.

One Internet ad uses an image of President Barack Obama with the text "Avoid Foreclosure. Qualify For Obama's New Housing Rescue Plan." Only by reading a fine print disclaimer can the consumer learn that the site is not sponsored by the government.

Over the past year homeowners have been flooding state attorneys general with complaints about for-profit loan modification consultants. Roadside billboards in places like Las Vegas scream, "Save my property!" and radio ads promise "expert help." Some companies comb property records and send mail designed to look like it is from the homeowner's lender.

Some of those offering help are former brokers, agents and appraisers who've seen their previous business evaporate. But consumer advocates say the legitimate consultants are no more effective than nonprofit credit counselors who also work with lenders at no charge.

The shadiest operators, consumer advocates say, can actually force borrowers out of their homes by persuading them to sign over the title or grant power of attorney.

While not every loan modification business is fraudulent, "swimming around in those waters are a lot of sharks," said Jim Carr, chief operating officer at the National Community Reinvestment Coalition in Washington.

Some states recently have toughened penalties for perpetrating foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges. But many state prosecutors have not filed criminal cases, instead proceeding with civil lawsuits.